The Pedestrians With Stupid Heads powerup does just that: it makes the heads of all pedestrians on the level, alive or not, grow. This is purely for comedy, as it has little impact in gameplay. Regardless, the big heads also increase the pedestrians' size, making them bigger targets, and easier to hit.

This is an unused powerup in Carmageddon: TDR 2000. Rather than doing the above, it does absolutely nothing. Its icon suggests that maybe the heads weren't suppose to just grow, but get tilted as well.